California Employment Law

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4-60 California Employment Law 60.syn

Title

Liability for Wrongful Termination and Discipline

Author

Kirby C. Wilcox;Joy A. Maulitz, III, J.D.

Chapter Summary

ABSTRACT TEXT:

This chapter, Liability for Wrongful Termination and Discipline, provides an overview of wrongful termination law in California. It describes the employment at-will doctrine and discusses the exceptions to the at-will rule. The chapter examines the numerous state and federal statutes that provide protection to the employee against termination or other discrimination by the employer. It also discusses the three judicially developed exceptions to the at-will rule termination in violation of public policy, breach of an implied or express contract not to terminate except for good cause, and breach of the implied covenant of good faith and fair dealing and the applicability of principles of wrongful termination to disciplinary actions by the employer that fall short of actual termination. Finally, the chapter describes the remedies available to the plaintiff in a wrongful termination action, and covers the defenses that may be raised by the defendant.

The meaning and significance of employment at-will as codified in the Labor Code is discussed, the emergence of exceptions to the at-will doctrine including statutory exceptions, and judicial exceptions. The chapter provides a general introduction, as well as comprehensive coverage to California and federal statutory restrictions on employee discharge or discipline of employees. The chapter outlines violation of public policy and limitations on discharge including the elements for a cause of action for wrongful discharge in violation of public policy, a general discussion of the cause of action, the sources of public policy including legislative or constitutional bases, subsequent employer's retaliation for protected activities in a previous job, actions against public entities, and actions against individuals. Also covered is breach of express or implied-in-fact promise not to terminate except for cause including contractual limitations on discharge including the elements of a cause of action, factors creating an implied agreement, the good cause requirement, and the effect of written employment contracts, handbooks, policies, and other writings.

The chapter considers breach of implied covenant of good faith and fair dealing generally, and provides the elements of a cause of action. It identifies employer actions short of actual discharge such as constructive discharge, wrongful discipline and demotion, and salary reductions. Finally, the chapter covers remedies in wrongful discharge action such as tort actions, contract action, issues of mitigation of damages and deduction of collateral compensation, and equitable remedies. The chapter discusses defenses to wrongful discharge actions such as the issue of preemption by statutory remedy, the statute of frauds, the parol evidence rule, statute of limitations, termination for cause, claim of no employment relationship, at-will employment of corporate officers, arbitration agreements, the effect of after-acquired evidence justifying termination, failure to exhaust internal grievance procedures, as well as potential counter-claims against employees, and the availability to the employer of the unclean hands doctrine of in the context of wrongful discharge.

For discussion of bringing and defending wrongful termination and discipline actions, see Chapter 61. Procedures and practices for avoiding claims of wrongful termination and discipline are discussed in Chapter 62. Related causes of action are covered in Chapter 63. For more detailed discussion of certain specific statutes relating to wrongful termination, see Chapter 5 (wage and hour remedies) and Chapters 40-44 (equal employment opportunity laws).

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